4 Simple Ways to Make Filing Taxes Easier Every Year

If I were in a public setting I would ask for people to raise their hands to indicate whether or not they enjoyed filing taxes. I’m certain I’d see more hands raised for the “not enjoying” taxes option than the other. It is often said that there are three certainties in life: birth, death and taxes.

Taxes are never a fun subject, especially when we have a government that likes to live without a budget and spends us into oblivion. However, this does not free us from the duty to pay our dues as it were and to be responsible to file our taxes.

There can be a lot of work that goes into filing taxes and while many hate doing so, it still requires our attention to ensure the tax filing process goes smoothly so we can make sure we have jumped through all of the hoops the IRS throws our way.

However, there are a number of things you can do to streamline the process and make it easier for you in the long run and work for you pretty much every year. Before I go any further, I want to give the disclaimer that I am NOT a tax professional and that if you have a specific tax question to ask a certified tax professional who would have access to the latest professional tax and accounting software.

Keeping Good Records are Key to Filing Taxes

One of the best ways to make filing taxes smoother is keeping good records. There are various things that might impact your taxes for the better or worse and a good record keeping system is vital for this. Do you have business mileage or mileage for trips to the hospital/doctor? If you do, then it’s possible that mileage would be deductible for you.

An easy way to keep track of this is by having a small notebook in your car. Do keep in mind that the IRS wants specifics and often looks at bloated mileage as a red flag, so make sure to notate the Who, What, Where and Why of your trips along with the specific to/from mileage and date. We do this ourselves for our business and it takes only a minute to record the information.

A similar thing can be done for medical expenses, giving to charities, etc by keeping a folder of all pertinent information that relates to giving or expenses that might qualify as a tax deduction. Please keep in mind that many deductions are only available if you itemize your taxes.

Keep Your Professional Life Separate From Your Personal Life

If you run your own business like I do, then you know how harried life can get when you’re dealing not only with your personal finances but also your professional finances. Some of these things might be difficult to keep completely separate, but the easiest way to do so is by setting up a business checking account. This allows you to deposit all of your professional income into the account and not have to worry about co-mingling it with your personal income.

This might seem like just ANOTHER thing to manage, but it actually makes life much easier and did not take much for us to set up. We set it up with the same bank we have our personal accounts with and thus have the same login for both accounts and can take care of everything from one place. Having a business account will also make it much easier when your filing taxes as you should be paying for business exclusive expenses straight from your business account throughout the year and won’t have to separate it from your personal expenses.

Don’t Wait For the Last Minute

I hate to break it to you, but April 15th is coming up very shortly, don’t put off taking care of all the steps associated with filing taxes to the last minute. I’ve seen way too many people in my line of work do this and it only ends up in having headaches at the end of the day. I know that staying on top of your records might not be the most fun, but a little bit of work throughout the year should make it much easier for you when it comes time to be filing taxes.

Personally speaking, Mrs. Frugal Rules and I discuss our business mileage and expenses each month and I enter them into an Excel spreadsheet. This allows me to know where we are at at any given time, but it also means that at the end of the year the majority of my work is done and I can forward all of our information to our tax professional. Another benefit of not waiting until the last minute is that you can also use it to analyze your withholdings so you’re not getting too big of a tax refundthe following year.

Hire Professional Help to File Your Taxes

With the rising popularity of filing taxes online and tax preparation software it allows many to handle filing taxes simply as the program walks you right through it. For years I used H & R Block’s software and had no issues (and enjoyed it, to be honest). However, with the growth of our business there just became too many moving parts to filing taxes and I reached a point where I was not comfortable in handing them myself.

As someone who likes to be frugal and do things myself, this was a difficult but necessary decision. It has saved me a lot of time and I now have the confidence that our taxes are done correctly and done by an expert who’ll maximize our return. If you find that you’re over your head in filing your own taxes, then a tax professional is a great option. If you’d rather handle filing taxes on your own there are several good options to choose from, as seen below:

I’ve personally used three out of the four above, and had a relatively good experience with each though defaulted to the H & R Block option for a number of years prior to hiring out our tax preparation needs. If you do use one of the above options keep in mind that most of them offer some sort of free Federal filing as well as discounts on State filings.

How do you handle your taxes? Will you be filing taxes on April 15th, or do you get them done early? What tips do you have to make filing your taxes easier?

I'm the founder of Frugal Rules, a Dad, husband and veteran of the financial services industry. I'm passionate about helping people learn from my mistakes so that they can enjoy the freedom that comes from living frugally. I'm also a freelance writer, and would love to help out if you have the need. If you're wanting to learn how to monetize your blog, check out my blog coaching services to see how I can help you take your site to the next level.

This was a much-needed post for me and my wife. Our taxes are getting more and more complicated each year and we seem to have one-offs or new side income to add each year (Not a bad thing!).DC @ Young Adult Money recently posted…Why your income and passion should align

Great lessons! I used to wait until the last minute, only to realize that something I THOUGHT I had was missing. Then I’d be stuck and have to file an extension…and just elongated the process. Now I gather everything in a file at the door (as the mail arrives all tax stuff goes in it) and then get the information compiled a little bit every day. Tomorrow I’ll have everything completely together and will file next week. Because I always owe, it’s gonna be about April 15th at 11:59 pm before that check hits the mailbox!AverageJoe recently posted…Dow Reaches All-Time High: Is Now The Time To Invest?

I keep a tax file that I start at the beginning of the year, everything that happens during the year that is tax related such as charitable donations, property taxes and the like goes into that file. having everything handy in a single location makes it so much easier to prepare my taxes. I usually have everything done and ready to file by the end of January and it only takes a few hours worth of work.Jose recently posted…A Coupon for the Man (or Lady) Cave

I am filing today thanks to your reminder! My limit is March 30th and I have been procrastinating on that for months. I always spend a ridiculous amount of time resetting passwords and looking for log in information so this year I will save it somewhere obvious. Like every year :spauline recently posted…Buy my method, not my lifestyle

So I actually like doing my taxes…I like playing with numbers, total loser I know. The day I owe a bunch of money it won’t be so fun anymore I know.Catherine recently posted…Virtual Banking Isn’t For Me

I’m learning that hiring professionals to handle things I’m only marginally good at or don’t really have time for is a must. I’d rather spend the money and get it done than be frustrated because it took too long. In regards to taxes, I’m amazed at how much more the professionals know. Now that my wife is in the industry, she has discovered many new ways to save on taxes (through deductions and simple tax planning) that many business owners don’t know anything about.Brian @ Luke1428 recently posted…I’m Turning 40 – Now What?

So important to hire professional help! Having rental property, I actually interviewed 3 different CPA’s in order to find the one I have, who is a real estate investor. He helped me create a partnership and save considerably on taxes. You pay for what you get for sure!!Jim recently posted…Death Panels Phooey, Here Is How It Will Really Work

All great tips John. I need to start with a new business checking account. I haven’t been able to find any good free ones as of late and I don’t have a lot of transactions, so I don’t want to pay a fee for a business checking account.Grayson @ Debt RoundUp recently posted…Tax Rebates for College Students and Their Parents

Thanks Grayson! I would definitely recommend one as you grow your side gig, it’ll make things much easier. We have ours through our main bank so we get by with having no fees which is nice. Our next step is to get a business credit card.

Tax is hell this year. There are too many things to deal with.
I started a couple of weeks ago and it will take me at least 3 more weeks to finish up. I only have a couple of hours per week to spend on it. not good…Midlife Finance recently posted…Ten Ways To Get Cash….FAST!

Is it really that time of year again! I have the option to file mine at any point from April – January so I’m not stressing too much yet. Sean @ One Smart Dollar has put the idea of a business expense trip to FinCon13 in my head though, tempting!Money Bulldog recently posted…Dow Hits Record Highs ~ Are Stock Markets Due A Correction?

Unfortunately it is Adam, though we just got ours finished the other day so I am happy. Yes, FinCon should be able to count for a business expense generally. We’re looking forward to taking advantage of that ourselves.

Good tips John! I would also add that not only keeping good records is important, but also keeping a running tally of write-offs and expenses via an Excel spreadsheet. This makes it so much easier come tax time, especially if you have a home office deduction and business related expenses.Kyle James | Rather-Be-Shopping.com recently posted…7 Tips for Financially Savvy Moms

We just found a new accountant for our business \ personal this year, which wasn’t an easy task, as Accountants in our city charge very high fees. Our stuff is all done as of yesterday. We have until April 30th to submit personal returns and 4 months after our business year end to submit business returns. I am not a big fan of this time of year but I’m sure glad ours are done now.Tackling Our Debt recently posted…Can Money Buy You Happiness?

Great tips, John. I do use a CPA since it just makes it easier with the business. I probably could figure it out on my own, but since I tell people to not be afraid to get help from a financial advisor … well, I figure I should follow my own advice. Tax law is always changing and I can’t keep up with it, but my CPA knows it inside and out. It gives me great peace of mind to know my taxes are done properly and maximized to my benefit. Shannon Ryan @ The Heavy Purse recently posted…Meet Shannon Ryan: Financial Literacy Advocate

Thanks Shannon! We use a CPA ourselves, we just started using one last year. I could figure ours out as well too, but having the business throws another ball of wax into the situation and would probably take me too much time.

If we had a business I’m sure we would be hiring an accountant to take care of our taxes. We have yet to file our taxes because I am going to try and do them on my own. It’s a scary thought but I read through it all on the CRA website and it doesn’t seem so bad. I’m sure I’ll report how I make out . Cheers!Canadian Budget Binder recently posted…Net Worth Update CBB February 2013-Move or Stay?

I can totally understand going it alone Mr. CBB. I don’t know how it is in Canada, but in the States, most should be able to handle doing their own taxes. I did ours for years and sort of miss doing them, but it’s worth it to me to pay an expert to do them.

Ugh, thanks for the reminder I have to do my taxes. Can you re-post this in a few weeks, LOL. I used to love taxes when I was in school and actually got something back. Now it just sucks.Melinda Gonzalez recently posted…Beer Stock Exchange and Frugal Vacation

I think asking if people LIKE filing taxes is the wrong question. It’s like asking if people like brushing their teeth. It’s a a chore, nothing more or nothing less. And based on conversations I’ve had, the idea that everybody hates taking care of the taxes is pretty over-blown. most people I know don’t have a problem. Since the average person seems to get some sort of a refund, why wouldn’t they be eager for tax time to come around?

Granted I only had a couple dozen professional transactions total last year, but I didn’t have any trouble keeping track of professional expenses and income even though it was all done through my personal checking account.Edward Antrobus recently posted…February 2013 Net Worth Update

Thanks for your comment Edward. I would have to respectfully disagree though. In my experience in financial services industry I have seen a pretty broad range of individuals and their personal tax situations. I would say in general, most people that I have dealt with over the years were no fans of doing and filing their taxes. Why else would so many people put it off to the last minute, file for an extension and then wait until the last minute on their extension? I think it points back to either they just have not taken the time, are completely unorganized or greatly dislike doing it.

I completely understand if you have only a small number of transactions per year to not get a separate account, but when they start adding up it’s in your (in general) best interest to get a business account.

You see all of the people who are running to a professional for help which would skew your perception. I would agree that the people with complex filings, or who owe money are generally going to dislike taking care of it. Vs I tend to talk to people with relatively simple returns and/or getting money back, which skews my perception in the other direction.Edward Antrobus recently posted…Job Search Tip: Never Answer Phone Calls When Busy

Mine are not done yet, but everything is ready and waiting on the accountant to get them done. It’ too stressful for me to try and do it with all the variables that go on with my practice and now, with rental income. I hate tax season. It makes me anxious.Kim@Eyesonthedollar recently posted…Sequestration: Has the US Government Cried Wolf Too Many Times?

I can relate Kim. We have income and expenses from so many different sources that it’s just too much for me to adequately handle. I was anxious this year too, thinking we’d have to owe quite a bit but thankfully I was wrong.

Thanks to employing a great accountant, I really don’t mind filing taxes. I have already given her all my paperwork to file for 2012. I provide her with everything on a silver platter (organized receipts, an annual expense and income report along with a summary of my quarterly tax filings). I also opened a business account as soon as I became self-employed to help keep things in order. In the event of an audit, I am definitely prepared.K.K. @ Living Debt Free Rocks! recently posted…Giving Feels Good

I wish that some people I knew would follow the “keep your work life and personal life separate” tip. It drives my wife nuts because they have to dig through at the end of the year and take out everything that isn’t legitimate.Justin@TheFrugalPath recently posted…January & February Income Plus Some Updates

If you use a tax professional, keeping the same person year over year really helps. We have used the same person for the last 3 years and he has all of our information saved. It makes things much easier when he can see what we did last year and copy most of that information forward into the new year.Nick @ ayoungpro.com recently posted…The Financial Six-Pack for the Young Professional

I prepare the family tax return and must admit I procrastinate. This year, I’ve made it a goal to file before March is out.

Unfortunately, last year we had a family emergency and I was away from home from April 4-April 18th. Needless to say our returns were late!Kay Lynn recently posted…Do You Know the Facts About Gum Disease?

I think ‘keep good records’ is the most important of your list. It’s so hard to reconstruct the past year in March without good records! Breaking up the tax prep task into tiny chunks over the course of the year almost makes tax prep effortless. Well, not effortless (and certainly not painless!), but easier. Kurt @ Money Counselor recently posted…Stock Huckster at Work

Great post, John. I’m totally with you about hiring a professional. We’ve had the same guy for years, he knows our deal, and it’s a 20 minute appointment. Well worth paying him, to us anyway, considering the amount of time it would take me to figure out how to do it.Laurie @thefrugalfarmer recently posted…Daylight Savings Time: What You Might Not Know

I remember when I was employed full time and because of my situation at the time filing taxes was a breeze. But I’ve been self-employed for four years and I HATE doing prepping my taxes. I don’t even do them myself, but the prep that goes into it is a drag. In fact I’m on lockdown this weekend doing them before my tax appt on the 29th. I’t’s gotten more streamlined over the years, but I still have trouble with organization over the course of the year, especially with mileage. I just totally forget every time I get into my car.Budget & the Beach recently posted…Link Love/Week in Review 3/7/13

I totally agree Tonya. The prep can be a drag, especially as you start compiling more and more expenses and income. The car can be a tricky thing to track. We just keep our little notebook in the front seat to make it easier to remember.

These are some good tips John. Whenever I get something throughout the year I have a folder I put things into like receipts or whatever else I think may be tax worthy. I use Turbo Tax to do my taxes. The last two years have been brutal trying to get everything done while being in school. Earlier this year I did a quick preliminary to get somewhat of an estimate. Didn’t like what I saw so I haven’t had a chance to go back to finalize the returns yet. I am hoping to get them done within the next night or two. Turbo Tax makes things pretty easy but it is always a stressful time of year.Alan recently posted…Cable TV, What a Rip Off

I usually use Turbo Tax for my taxes. Our tax situation is still pretty straightforward. I would consider using a CPA in future years, if things got more confusing.CF recently posted…Doing my 2012 Taxes with Turbo Tax

I don’t know if I’m weird but I actually love filing my taxes. I am not crazy about the preparation, but once all the totals are tallied up I just take my paperwork to my accountant and bing, bang, boom it’s done. 4 to 6 weeks later I get my refund and it’s all good.Tahnya Kristina recently posted…Get online and manage your money

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